Saga, the group which protects the rights of older people, slammed the Bank of England for making changes which only benefit the young.
Senior citizens in the UK have felt the pain more than many others, with pensions shrinking as a result of rock-bottom interest rates, plus the rising cost of living. Saga says pensioners have been unfairly made to shoulder the brunt of the burden and that a drop in OAP spending is at the root of the recession.
The report is based on figures available from the Centre for Economic and Business Research and claims that £25 billion has been siphoned out of the country’s economy, as over-50s shrink their spending. According to Saga, these cutbacks, including stopping going to restaurants and not going shopping, has ‘helped push the UK into recession.’
The report has dubbed the decision by the Bank of England, to embark on a quantitative easing programme, as creating a ‘toxic combination’ of poor pension pay-outs, rising inflation and low interest rates.
The latter has been popular with those with a mortgage, as it has eased the strain on their budget, but savers have paid the price. The CEBR chief executive, Professor Douglas McWilliams, said quantitative easing had been a successful support during the economic crisis, but admitted it was ‘not a measure without cost.’
The Saga report suggests that those aged between 65 and 74 have experienced an 11% plunge in the ‘real value’ of their money in the last four years, whilst also being rocked by a 20% hike in the cost of living. The director of the charity, Dr Ros Altman, said the combination meant many pensioners were struggling to afford the basics, such as food.